SARFAESI auction purchasers are not liable for prior electricity arrears absent notice, and fresh supply cannot be denied.

An auction purchaser of property sold under the SARFAESI mechanism cannot be made liable for the previous owner's electricity arrears unless the auction notice or sale terms clearly shift that burden. Past dues remain recoverable from the defaulting former owner, and the distribution company may pursue that recovery separately. A fresh electricity connection cannot be refused to a purchaser who had no connection with the earlier default merely because arrears existed against the prior owner. On that basis, the refusal of supply was held unsustainable and the intra-court appeal failed.

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Issues: Whether an auction purchaser of property sold under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act can be refused a fresh electricity connection on the ground of dues owed by the previous owner.

Analysis: The property had been purchased in a public auction conducted under the SARFAESI mechanism. There was no indication in the auction notice that the purchaser would shoulder the electricity arrears of the former owner. The liability for past electricity dues remained that of the previous owner, and the distribution company could pursue recovery against that person. A purchaser who had no connection with the default of the prior owner could not be denied a new supply connection merely because arrears existed against the earlier owner. In intra-court appeal, interference was unwarranted as the order under challenge did not suffer from patent illegality.

Conclusion: The refusal to grant a fresh electricity connection was not sustainable, and the appeal failed.

Ratio Decidendi: An auction purchaser who acquires property under a SARFAESI sale is not liable for the previous owner's electricity arrears in the absence of notice, and fresh supply cannot be denied on that basis.

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